- A bill presented by a Republican senator to the state legislature proposes the adoption of BTC as a payment method.
- If the proposal is approved by state legislators, it will still have to be approved by US Congress.
- The federal government has shown no signs of wanting to ban cryptocurrencies, despite the fact that the regulatory issue is considered a matter of high national interest.
The bill to make Bitcoin (BTC) legal tender in the state of Arizona was presented to the state legislature by Senator Wendy Rogers (NYSE:ROG), who has been promoting the adoption of cryptocurrency for some time.
The Arizona Legislature will need to assess whether the bill is consistent with federal law and the United States Constitution.
The proposal that was presented on Tuesday last week by the Republican legislator and had a second reading on Wednesday, awaits the final vote in the state senate.
In order for it to become law and for Bitcoin to be legal tender in that state, it must not only have the approval of the Arizona Legislature but also of the United States Congress, since it is its exclusive jurisdiction.
“The Coinage Clause of the Constitution means that the power to determine what is and is not legal tender in the United States rests solely with Congress,” said attorney Preston Byrne, a partner at Anderson Kill law firm, according to blockworks.co. “If enacted, [the bill] would be largely symbolic,” he added.
On the Flipside
- The presentation of the proposal coincided with the new call made by the International Monetary Fund (IMF) to El Salvador to repeal the Bitcoin Law.
The credit organization considers that the cryptocurrency could carry serious risks for the economy of the Central American country and leave it on the verge of bankruptcy due to its high volatility.
However, the position of the US towards BTC and the other cryptocurrencies has so far been one of tolerance. It is likely that in a few days the government will issue an executive order to regulate crypto assets that it considers a matter of national security.
Neither the federal government nor Congress have shown signs of wanting to ban the use of cryptocurrencies. On the contrary, both the chair of the Federal Reserve, Jerome Powell, and the director of the Securities and Exchange Commission (SEC), Gary Gensler, have made favorable comments.
Cryptos: Currencies or Forms of Money?
“Aside from the legality though, it begs the question of whether digital assets are actually ‘currencies’ or forms of ‘money,’" says Steve Gannon of the law firm Murphy and McGonigle. This is something that Congress will have to clarify when it debates this matter. The other question that the lawyer asks is, for what purpose would the state accept digital assets as “legal tender.” Will it simply be an alternative payment instrument or will it have a broader scope of financial action?
According to Byrne, even if the bill passes and becomes law in Arizona, the impact of BTC use on the state’s economy will be limited.
He even believes that Arizonans could not be "forced to accept bitcoin in a constitutionally acceptable manner." “Arizona could certainly pass a law like this and the state government could choose to accept Bitcoin as payment for Arizona taxes, but this would not change the legal treatment of Bitcoin as property from a federal tax perspective,” Byrne clarified.
Why You Should Care
- Senator Rogers, who is on the Senate Blockchain and Cryptocurrency Study Committee, promised to make Arizona a crypto-friendly state.
- As enthusiasm for BTC grows and the need to attract investment from the crypto industry increases, other states could follow in the footsteps of Arizona and discuss the benefits of crypto.
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